ARKO (ARKO) Moves 6.8% Higher: Will This Strength Last?

ARKO Corp. ARKO shares soared 6.8% in the last trading session to close at $5.35. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 17.5% loss over the past four weeks.

Arko’s stock rally is an extension of its ongoing transformation efforts, supported by margin expansion, disciplined cost control and improving sales trends. Ongoing progress in dealerization, loyalty programs and retail optimization continues to bolster its growth outlook.

This company is expected to post quarterly loss of $0.16 per share in its upcoming report, which represents a year-over-year change of -33.3%. Revenues are expected to be $1.66 billion, down 9.4% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For ARKO, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on ARKO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

ARKO is a member of the Zacks Consumer Products - Staples industry. One other stock in the same industry, Krispy Kreme DNUT, finished the last trading session 4% lower at $3.35. DNUT has returned 15.2% over the past month.

For Krispy Kreme, the consensus EPS estimate for the upcoming report has changed -27.3% over the past month to -$0.06. This represents a change of -20% from what the company reported a year ago. Krispy Kreme currently has a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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